Thursday, September 25, 2008

Last week I attended OMMA Global in New York City. I thought I'd learn all that I never knew about digital media and all the new platforms. Instead, I found out that I knew just as much as the people giving the talks. They all went back to basics.

You can't execute or buy the new media without understanding your target audience and the benefits you deliver to them. How basic can you get?

The creative should be appropriate to the media you're using -- another basic.

Sure, there were all sorts of cool companies with vertical marketing opportunities, widgets, and digital delivery mechanisms. But they're all worthless, if you don't have the marketing basics down.

Tuesday, September 23, 2008

Last week I attended "OMMA Global Expo -- Platform Wars". This was a conference in New York City for the digital media world, sponsored by MediaPost Live. I was probably the oldest person at the event. As I attended workshops and toured the expo hall, I felt as if I were at a Venture Capital Fair, only instead being populated by young companies looking for capital, these were young companies looking for customers. These businesses had made it. They had raised capital and launched.

Truly, the oldest companies I met had started in 1999. One speaker on a panel had started and sold her business, espin.com, to Hearst. Espin directs interactive media activities and advertising to teenagers. Another really cool company I talked to was Sprout -- a widget company. www.sproutbuilder.com. They enable rich collaborative content.

It was great to be around so many companies that had actually made it in the digital media space. Some were the platforms -- the high tech. companies that provide the code and the servers that makes it all work. Some helped bring media buyers and sellers together. Some offered search, others vertical marketing vehicles.

The point is that the digital media world is crowded, but people with great ideas, great management and lots of energy can and do make it.

Monday, September 22, 2008

This Research Brief from The Center for Media Research shows that inflation is a major problem for small businesses. Read on....

Monday, September 22, 2008Small Business Still Negative, But Expecting Some ImprovementThe Quarterly NFIB Research Foundation Small Business Economic Trends Data reports that the Index of Small Business Optimism rose 2.9 points to 91.1 (1986=100), continuing one of the longest strings of recession level readings in the history of the survey (started in 1973). Two-thirds of the gain was due to a dramatic improvement in the percent of owners expecting the economy to improve over the next six months, says the report. Though the direction of change was positive, there's a long way to go to restore normal levels of the Index to the average reading of 100.

Seasonally adjusted, there was a decline in average employment per firm of 0.04 workers reported by small business owners in August, not as bad as July, but still on the negative side.

11% of the owners increased employment by an average of 5.7 workers per firm 15% reduced employment at average of 3.7 workers per firm (seasonally adjusted)

46% of the owners hired or tried to hire (down 3 points)

76% of those trying to hire reported few or no qualified applicants for the job openings they were trying to fill

9% of the owners reported that the availability of qualified labor was their top business problem, one point lower than July15% reported unfilled job openings, down 2 points from July (the 34 year average is 22 percent)

The frequency of reported capital outlays over the past six months rose 2 points to 54 percent of all firms, still at "recession" levels historically. The weak economy has reduced the need for expansion and new equipment and put pressure on cash flows.

Inventory reduction has been heavy for the past three months, confirmed by the second quarter Gross Domestic Product estimates.

At "street level", the inflation picture remained sour. The net percent of owners reporting higher average selling prices dropped 6 points to a net 26 percent in August (seasonally adjusted)38 percent reported raising average selling prices, down 4 points

13 percent reported lower selling prices, up 2 points from July

The percent of owners citing inflation as their number one problem fell 2 points to 18 percent. The average percent of owners citing inflation as problem # 1 since the monthly surveys were started in 1986 is 3 percent. Plans to raise prices fell 8 points to a net seasonally adjusted 30 percent.

A year has passed since the Federal Reserve declared the existence of a "credit crunch," but no evidence of serious credit problems has appeared on Main Street. Regular borrowing activity was reported by 34 percent of the owners, unchanged and typical of readings for the past 15 years.

At street level, inflation appears much worse and is a major source of angst for consumers and all in all, it is looking like a pretty slow second half of the year, concludes the report. Since 1983, the average percent of owners citing inflation as a top problem has averaged 3 percent, compared to the 20 percent readings in June and July. August's 18 percent reading was not much of an improvement and the tie with "poor sales" as the top business problem fits the "stagflation" picture.

Please visit the NFIB here for more information including a PDF file containing charts, graphs and trends.

Monday, September 15, 2008

I was just reading an article in the Pennsylvania Gazette (the alumni magazine of the University of Pennsylvania) about funding IT grad's entrepreneurial ventures. A couple of Wharton grads decided to start a venture fund focusing on entrepreneurs with Penn connections. They've funded everything from Diapers.com to First Flavor.

The one statement that stood out to me most was this:

“When I’m looking at the financial projections for a company, the one thing I know for certain is that they’re wrong,” says Topche. “Maybe the market changes; maybe a new competitor will appear; maybe there will be a regulatory change. The ability of the management team to adapt to that change in their environment by adjusting their product or doing something different strategically is almost always the determining factor in the success of that company. These are things that you have to get comfortable with before you write a check.”

That's why Venture Capitalists like investing in smart management. While you can write a great plan and have detailed financial projections, you have to be flexible and able to adjust your plan as the market changes or opportunities present themselves.

Thursday, September 11, 2008

The Wharton Alumni newsletter had a great interview with two Wharton alums who are entrepreneurs (Isakow and Minskoff). They talked about their mistakes and gave some good advice. Here's a link to the whole article -- http://wep.wharton.upenn.edu/gis/article.aspx?gisID=70

Along with the moderator, Bob Chalfin (an instructor), they said the following:

Minkoff suggested that they be flexible. Successful entrepreneurship requires a business plan that allows for lots of wiggle room. "Your business will never play out like it does in your business plan,' he said. "You have to have flexibility in your structure-your money, your timeframe, your markets. You need to plan for bad things happening-stuff will cost more than you thought, key people will leave, and markets will evaporate.'

Isakow agreed, offering up a philosophical take on ups and downs of self-employment. "I read something early in my career that really influenced how I look at my business: 'Failure is never fatal, and success is never final.' There are always going to be bumps in the road.' He added a bit of guidance of his own, saying that, when starting a company or investing in one, you must do rigorous analysis, no matter how promising an idea sounds. "Don't just believe the story,' he added. "I'm the worldwide owner to the rights for solar-powered lawnmowers. You'll notice that you don't see too many of those around. I believed the story.'

Wednesday, September 10, 2008

I keep wondering how I can use my talents and business experience to make more of a positive difference in the world. While I love helping entrepreneurs by coaching them through the business planning process or writing or editing their plans, sometimes I want to start another business myself. That's why the article I've pasted below intrigues me so much. It's about being a social entrepreneur -- starting something to fill in gaps where government or private enterprise fail.I've been volunteering in my church and community to promote local "Aging in Place." We help local seniors to stay in their homes as they age. They face all sorts of challenges. We're here to help them with those challenges. Others all over the country are doing the same. But no one else that I've come across has used the model we have at Aging in Place in Darien. We use the social services already in place, rather than ignoring them. Then, we try to fill in gaps and connect seniors with the services already out there.In my work, I've been reading as much as I can. This article is about solving transportation problems for seniors. Read on....ITNAmerica featured in Report to the President December, 2007, Washington, D.C.ITNAmerica was featured in The Small Business Economy: A Report to the President, an annual series used by policymakers, academics, librarians, and others to learn more about small firms.ITNAmerica is one of eight examples of social entrepreneurship included in a chapter by Andrew Wolk of Root Cause titled "Social Entrepreneurship and Government: A New Breed of Entrepreneurs Developing Solutions to Social Problems."Chad Moutray, Ph.D, Chief Economist & Director of Economic Research for the Small Business Administration, said, "Congratulations on being on the leading edge of this exciting phenomenon!"Wolk, a senior lecturer in social entrepreneurship at MIT, describes social entrepreneurship as emerging at the nexus of the public, private, and nonprofit sectors. Innovation is a key role of the private sector; providing public goods and services is a role of government; and engaging individuals in action to achieve social goals is a role of the nonprofit sector. Social entrepreneurship has emerged where these roles intersect.Wolk's chapter represents one of the first explorations of the relationship between social entrepreneurship and government, and each case study showed a social-entrepreneurial initiative responding to some type of market failure, ranging from older Americans who must choose between their safety and their mobility, to building high-quality playgrounds in underserved communities.Seven other specific programs used as case studies illustrating social entrepreneurial approaches include City Year, Benetech, KaBOOM!, New Leaders for New Schools, Resolve to Stop the Violence Program, Outside the Classroom, and Triangle Resident Options for Substance Abusers, Inc.The chapter above can be found at http://www.rootcause.org/assets/files/SE_and_Gov_Wolk.pdf.

Monday, September 8, 2008

Next week, on September 15, I'm beginning to teach my course, Secrets of a Successful Business Plan. It's being presented by Darien Continuing Education. Several entrepreneurs who have taken this class in previous years have started successful businesses. Class participants can enter the annual CT Business Plan Competition to win start-up funding. We'll get into the five elements your business plan need:

A. The Big IdeaB. The MarketplaceC. The Business ModelD. The Marketing PlanE. The Path to Profitability

CI is a public/private partnership that provides venture funding. It was started to help Connecticut's economy grow via entrepreneurship. The organization is especially helpful to high tech, bio tech, and sustainable and clean energy companies. Visit their website and subscribe to their blog. Learn more about the clean energy fund and chances for start-ups to get funding.

Wednesday, September 3, 2008

When I attend venture capital events and look around the room, I'm almost always amazed to see so many men and so few women. Why is that?

A recent article in the Wall Street Journal (see link in my list of shared articles - Does an Aversion to Risk-Taking Hold Back Women Entrepreneurs?from WSJ.com: Independent Street by Kelly Spors) posits the idea that maybe there are fewer women entrepreneurs because women are risk averse. The article also surmises that women seek perfection, rather than jumping into a business before everything is finalized. Men are less afraid to do this. The article references another article about women in business that was published in the New York Times.

My own theory is that there are plenty of women-owned businesses, but most of the owners either want to keep their businesses small and easily managed or they don't want to give away ownership to equity investors. I like having a small business that I can run out of my home. I like being the sole proprietor, answering to no one but my clients. I want to focus on my craft and my clients needs. I want to manage my growth my own way.

I also don't have a business that investors would like. Most VCs I've met want a high-tech business with lots of intellectual property protected by patents. They want fast growth and huge returns on their investments. They're looking for a fast path to operating profit.

While there are some great women entrepreneurs out there, I just haven't run across many that fit this sort of profile. Maybe they've been beaten up too much in the corporate world. Maybe they've been looked down on for so long, they've lost sight of what they could accomplish. Maybe what lets them excel in school -- doing the work well and pleasing the teacher -- isn't what makes for a great entrepreneur. Who knows?

About Me

Owner of Upstart Business Planning: I craft business plans that answer the questions investors ask most often. Co-Author of The Purpose Is Profit: The Truth about Starting and Building Your Own Business and The Startup Roadmap: 21 Steps to Profitability"

Only 1 - 2% of business plans raise funding. 60% of the plans I've done have helped owners raise capital.

I was a founder of and former board member of At Home In Darien (formerly Aging in Place+Gallivant), a nonprofit in Darien, CT.
* MBA from Wharton in Marketing and Finance.